Camp says toughest work still ahead

Speaker of the House John Boehner, R-Ohio, left, and House Ways and Means Committee Chairman Dave Camp, R-Mich., confer as they leave a closed-door meeting on the "fiscal cliff" bill passed by the Senate Monday night, at the Capitol in Washington, Tuesday, Jan. 1, 2013. (AP Photo/J. Scott Applewhite)

Mid-Michigan’s member of Congress says in the wake of the “fiscal cliff” compromise, the hard work is just beginning.

“This legislation settles the level of revenue Washington should bring in,” said Rep. Dave Camp, R-Midland, the chairman of the powerful House Ways and Means Committee. “Next, we need to make the tax code simpler and fairer for families and small businesses, we need to pursue comprehensive and fundamental tax reform to make American businesses and workers more competitive in the global marketplace.”

Camp was one of 85 Republicans to vote for the plan, which was opposed by 151 members of the GOP. The plan got overwhelming Democratic support.

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The plan extends Bush-era tax cuts for single people making less than $400,000 or couples making less than $450,000. It also indexes the alternative minimum tax to inflation, and raises the inheritance tax on family estates greater than $10 million to 40 percent. Smaller estates are exempt from the tax.

“After more than a decade of criticizing these tax cuts, Democrats are finally joining Republicans in making these tax cuts permanent,” Camp said.

However, most taxpayers will see slightly smaller paychecks this year. That’s because a temporary reduction in payroll tax withholding – the taxes that pay for Social Security and Medicare – expired on Dec. 31. The reduction in withholding was part of the Obama administration’s economic stimulus package, and no effort was made to continue the lower withholding rate.

The “fiscal cliff” compromise, even with all its chaos, controversy and unresolved questions, was enough to ignite the stock market on Wednesday, the first trading day of the new year.

The Dow Jones industrial average careened more than 300 points higher, its biggest gain since December 2011. It’s now just 5 percent below its record high close reached in October 2007. The Russell 2000, an index that tracks smaller companies, shot up to the highest close in its history.

The reverie multiplied across the globe, with stock indexes throughout Europe and Asia leaping higher. A leading British index, the FTSE 100, closed above 6,000 for the first time since July 2011.

Despite the euphoria, many investors remained cautious. The deal that politicians hammered out merely postpones the country’s budget reckoning, they said, rather than averting it.